Peter Drucker – Management and Marxism

I have been doing some research.

It started with me wanting to find out a bit about what Peter Drucker, the world famous management guru, had been doing in Frankfurt before he left Germany. This was as a result of an idea I had for a story built around an anedcote about Peter Drucker that I have blogged about before, which I rather liked…

Its amazing how you both find that you are led on an intriguing voyage of discovery and how sometimes information that is extraordinarily germane comes at you out of left field. So it was with this project.

The information that I started with was really helpful – about the economy in Germany prior to WWII, and how the reparations negotiated at the Treaty of Versailles were intended to ensure that there would never be another war because Germany would be crippled with payments to the allies in that war. The irony of this of course is that when Wall Street collapsed, even then there was a global economy, and Germany was extremely reliant on the US as a trading partner. When the US market tumbled, Germany crashed. The economic conditions, ironically led to the rise of National Socialism and Adolf Hitler… All of this is quite commonly known… and must have had a substantial impact on the young Drucker going to university and studying international law in Frankfurt.

But this is where fate played a hand in my research… I was listening to a podcast from the BBC with a discussion about the Enlightenment and the philosophers behind it. Toward the end of the podcast there was some discussion about the concept that the Enlightenment as it is currently conceived was largely an invention by the allies after WWII to counter some of the concepts of Nazism. I found that interesting enough… But there was also some mention of the part that the “Franfurt School” may have played before and after the war… That took me on a new voyage of discovery.

I was intrigued to find out that the Frankfurt School was developed informally in the 1920's and was the first place in Germany where the economic theories of Karl Marx were seriously considered….

So… My thoughts were suddenly kicked into a new gear. It would have been impossible for Drucker to have been to Frankfurt University and to have not been aware of this debate. How much did it influence his thinking and the ideas that he introduced and were incorporated into the companies and countries that became the world beaters over the period from 1950 on?

I was intrigued also to discover that the first serious study that he did (for General Motors) was so controversial that managers were advised to not read it! Why?

Drucker interviewed executives and workers, visited plants, and
attended board meetings. While the book focused on General Motors,
Drucker went on to discuss the industrial corporation as a social
institution and economic policy in the postwar era. He introduced
previously unknown concepts such as cooperation between labor and
management, decentralization of management, and viewing workers as resources rather than costs.

claimed that an industrial society allows people to achieve their
dreams of personal achievement and equality of opportunity. He referred
to decentralization as “a system of local self government,” in which
central management tells division managers what to do, but not how to
do it. The young executives are given the freedom to made decisions -
and mistakes – and learn from the experience.

Would these be the kinds of ideas that Drucker synthesised from being exposed to Marxism?

Wouldn't it be ironic if the entire capitalist system of corporate growth and remuneration of employees through stock options and collaborative bargaining and distributed responsibility for achieving targets – all these things that we associate with good (capitalistic) management practices came from someone whose underlying rationale for management was based on a healthy appreciation of Karl Marx…

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